Usiminas Slumps After Brazil Orders CSN to Reduce Stake

Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-largest steelmaker, fell the most in almost two months after the country’s antitrust regulator ordered Cia. Siderurgica Nacional SA to reduce its stake in Usiminas.

The company based in Belo Horizonte slumped 6.3 percent to 8.99 reais at the close in Sao Paulo, the biggest drop since Feb. 18. CSN, the third-largest Brazilian steelmaker, lost 5.2 percent to 9.11 reais, the lowest since March 13.

Antitrust agency Cade ruled today that CSN needs to cut a stake in Usiminas to avoid hurting competition in the country’s steel market, Cade President Vinicius Carvalho said. CSN holds 17.4 percent of Usiminas, the largest individual stake outside the company’s controlling block, Cade said in a statement.

“We decided that it is fundamental that CSN reduces their shareholding in Usiminas to assure that both companies are allowed to compete and to avoid any information exchange and other practices that could hurt competition,” Carvalho told reporters in Brasilia after the ruling.

Cade counselor Eduardo Pontual declined to give details on when CSN would have to implement the decision and how much the stake reduction would be, citing confidentiality agreements.

The two companies are Brazil’s two largest producers of flat steel used in cars and appliances, making the market segment “extremely concentrated,” Cade said in the statement.

“The sector is going through a tough time, so it will be hard to find someone interested in such a large stake,” Roberto Altenhofen, an analyst at Empiricus Research, said by telephone from Sao Paulo.

Fonte: Bloomberg

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